Chinese investors say their efforts to buy into the New Zealand dairy industry have been "subjected to a concerted and well-orchestrated campaign of denigration" since the company began exploring its options.
A spokesman for the Chinese-controlled Natural Dairy (NZ) Holdings Ltd, Bill Ralston, said Fonterra chairman Sir Henry van der Heyden had urged farmers to take concerns they had about Natural Dairy's plans to the government and the Overseas Investment Office.
"Fonterra are clearly worried about the potential competition posed by Natural Dairy's plans and oppose New Zealand farmers gaining a greater choice in who they may supply or sell their farms to," said Mr Ralston.
Fonterra declined last night comment on his criticism -- a spokesman said Mr Ralston's statements did not warrant a reaction.
Sir Henry yesterday told journalists that global food security fears meant more foreign interests were keen to invest in New Zealand.
"If they get a very strong foothold in New Zealand and get a large amount of our milk supply here...we don't believe that would be ultimately the right thing for our farmers and we don't think that would be actually sustainable," he said.
Dairy companies operating in New Zealand with the support of overseas links include Synlait and its shareholder Mitsui (from Japan); New Zealand Dairies and its shareholder Nutritek (from Russia); Open Country Dairies and its shareholder Olam (from Singapore); Goodman Fielder (from Australia); and Britain's Cadbury.
Mr Ralston said free trade was "a two way street" and if New Zealand-based dairy interests could take advantage of the China market, "so Chinese-related investment has a right to put vitally needed capital into New Zealand without impediment from vested interests and the hysterical xenophobic reactions from some prejudiced quarters".
Mr Ralston referred to a Dominion Post newspaper report that a Waikato farmer at a Fonterra open day, Andrew Saunders, of Te Kauwhata in the north Waikato, had warned Chinese interests would undermine Fonterra's position.
"They will bring in their own labour, pay them $5 an hour and sell the dairy products for a third of the price in China," the newspaper reported Mr Saunders as saying.
But Natural Dairy said the allegation was completely false.
Mr Ralston noted that its value-added products might command higher prices in China and it would be able to pay more for its milk supply in New Zealand, "which is no doubt a commercial worry for Fonterra".
He said the company was committed to:
An entirely New Zealand workforce;
- Using Fonterra benchmarks of price, foreign exchange and production;
- Using "Made in New Zealand" on its products;
- Enforcing New Zealand standards of animal welfare and environmental standards.
Natural Dairy's proposed $1.5 billion investment -- including 29 farms previously owned by Crafar family interests, a proposed $30 million UHT factory, and a possible milkpowder plant turning out ingredients suited to infant formula -- would involve only a small percentage of New Zealand's total dairy farm assets, which were estimated to be worth at least $67 billion.
The Crafar purchase which Natural Dairy planned to re-submit to the Overseas Investment Office involved just 20,000 cows from the national dairy herd of 5.5 million cows.